InterviewChevron Phillips committed to Mid-East

13 December 2007 01:53[Source: ICIS news]

By Nurul Darni

DUBAI (ICIS news)--Chevron Phillips Chemical remains fully committed to its strategic investments in the ?xml:namespace>Middle East despite concerns over growing regional capacity amid keen competition, its CEO said late on Wednesday.

"There will be quite a few additional capacities coming out of the Middle East ... but they won't come on quite as fast or quite as much," said Raymond Wilcox.

"They would be spread out a little bit, partially due to costs... some of them have been deferred a bit, some of the contractors are quite stretched in labour. I do believe the market will continue to grow, but at a moderate pace," the CEO added.

Reiterating its commitment, the company will award the engineering, procurement and construction (EPC) contract for the third phase of its petrochemical project in Al-Jubail by the end of December.

"We expect to award EPC contract before the end of the year. It will become clearer in the next few weeks," he said.

"We are quite pleased with the number of companies interested in the project. It's a big project and it will be in two phases: one for the cracker side and the other for the downstream derivatives side," Wilcox added.

The new complex - owned by Saudi Chevron Phillips Co - will comprise of a 1.2m tonne/year cracker producing propylene, olefins and other downstream derivatives. The project uses mostly ethane and propane feeds.

Wilcox also said that in light of recent series of plant closures by US giant, Dow Chemical, it was important for chemical companies to stay efficient and competitive.

"Plant closures can happen anywhere in the world where facilities are not able to compete, particularly from an energy efficiency standpoint because energy costs are getting quite expensive now," Wilcox said.

Earlier this month, Dow Chemical said it will close plants across its businesses globally and cut up to 1,000 jobs to improve efficiency and cost effectiveness.

"If companies can't compete on that basis, that will erode their margins and we will continue to see selective plant closures or facilities because of it," he said.